Galarsa v. Dolgen Cal., LLC

Citation88 Cal.App.5th 639,305 Cal.Rptr.3d 15
Docket NumberF082404
Decision Date02 February 2023
Parties Tricia GALARSA, Plaintiff and Respondent, v. DOLGEN CALIFORNIA, LLC, Defendant and Appellant.
CourtCalifornia Court of Appeals Court of Appeals

McGuire Woods, Sabrina A. Beldner, Los Angeles, Amy E. Beverlin, Mathew C. Kane, and Travis Gunn for Defendant and Appellant.

Robins Kaplan, Clarkson Law Firm, and Glenn A. Danas ; The Bainer Law Firm, and Matthew R. Bainer for Plaintiff and Respondent.

OPINION

FRANSON, Acting P. J.

THE COURT *

-ooOoo- Plaintiff Tricia Galarsa sued her former employer, Dolgen California, LLC (Dollar General), to recover civil penalties under the Private Attorneys General Act of 2004 (PAGA; Lab. Code, § 2698 et seq. )1 for various Labor Code violations suffered by her or by other employees. Dollar General moved to compel arbitration, which the superior court denied. In November 2021, we affirmed the trial court's order. That affirmance was vacated by the United States Supreme Court when it granted Dollar General's petition for writ of certiorari and remanded the case for further consideration in light of Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. ––––, , 213 L.Ed.2d 179 ( Viking River ).

First, we conclude Viking River and the Federal Arbitration Act (FAA; 9 U.S.C. § 1 et seq. ) do not invalidate the rule of California law that a provision in an arbitration agreement purporting to waive an employee's right to pursue representative actions is not enforceable as to representative claims pursued under PAGA. Second, the severability clause in the arbitration agreement allows the unenforceable waiver provision to be stricken from the arbitration agreement. Third, we interpret the surviving provisions of the agreement to require arbitration of the PAGA claims that seek to recover civil penalties for Labor Code violations suffered by plaintiff. Consequently, those claims must be sent to arbitration in accordance with the principles established by Viking River and the FAA.

We further conclude the PAGA claims seeking to recover civil penalties for Labor Code violations suffered by employees other than plaintiff may be pursued by plaintiff in court. Thus, we disagree with the United States Supreme Court's conclusion that California law requires the dismissal of those claims. More specifically, we conclude plaintiff is an aggrieved employee with PAGA standing and the general rule against splitting a cause of action does not apply to the two types of PAGA claims.

Therefore, the order denying Dollar General's motion to compel arbitration is reversed in part and affirmed in part.

FACTS

In March 2016, plaintiff applied for employment with Dolgen California, LLC (Dollar General), a wholly owned subsidiary of Dollar General Corporation. As part of the application and hiring process, plaintiff accessed Dollar General's Express Hiring system, which allows persons to receive, review, and acknowledge documents related to their hiring and employment. On March 30, 2016, plaintiff electronically signed Dollar General's arbitration agreement by typing her initials into the text box next to the words "My Initials" and dating the form. She also marked a box stating she agreed to the terms of the arbitration agreement and understood that by checking the box, both Dollar General and she would be bound by the agreement's terms. Plaintiff did not opt out of arbitration. The arbitration agreement stated:

"Dolgen California LLC (‘Dollar General’) has a process for resolving employment related legal disputes with employees that involves binding arbitration. This Dollar General Employee Arbitration Agreement (‘Agreement’) describes that process and constitutes a mutually binding agreement between you and Dollar General, subject to opt out rights described at the end of this Agreement.
"You agree that, with the exception of certain excluded claims described below, any legal claims or disputes that you may have against Dollar General ... arising out of your employment with Dollar General or termination of employment with Dollar General (‘Covered Claim’ or ‘Covered Claims’) will be addressed in the manner described in this Agreement. You also understand that any Covered Claims that Dollar General may have against you related to your employment will be addressed in the manner described in this Agreement.
"Class and Collective Action Waiver: You and Dollar General may not assert any class action, collective action, or representative action claims in any arbitration pursuant to the Agreement or in any other forum. You and Dollar General may bring individual claims or multi-plaintiff claims joining together not more than three plaintiffs, provided that the claims are not asserted as a class, collective or representative action. Non-representative, multi-plaintiff arbitrations (up to the three-plaintiff limit) may only be filed if each of the plaintiff's claims: (1) arises out of the same transaction, occurrence, or series of transactions or occurrences; (2) arises out of the same work location; and (3) presents a common question of law or fact. A challenge to a multi-plaintiff action can be initiated by any party by filing a motion to dismiss or sever one or more parties. The arbitrator shall rule upon the motion to dismiss or sever based upon the standards set forth in this Paragraph. NOTE: This waiver does not apply to claims under the National Labor Relations Act. "

The arbitration agreement stated its procedures "will be the exclusive means of resolving Covered Claims relating to or arising out of your employment or termination of employment with Dollar General." The covered claims included alleged violations of wage and hour laws and alleged violations of any other state or federal laws.

The agreement contained the following severability clause: "If any parts of this Agreement are found to be invalid, illegal, or unenforceable, the validity, legality, and/or enforceability of the remaining provisions will not be affected by that decision, and any invalid, illegal or unenforceable provisions shall be modified or stricken."

In April 2016, plaintiff began working for Dollar General as an hourly-paid assistant manager. Her employment ended in January 2017.

In October 2017, plaintiff's attorney mailed a written notice to the Labor and Workforce Development Agency and defendant pursuant to section 2699.3. Over 65 days passed without the agency responding to plaintiff's notice.

PROCEEDINGS

In February 2018, plaintiff filed a complaint seeking civil penalties under PAGA for violations of the Labor Code. In May 2018, plaintiff filed a first amended complaint for civil penalties under PAGA based on alleged violations of Labor Code sections 201, 202, 203, 204, 226, subdivision (a), 226.7, 510, 512, 1174, subdivision (d), 1194, 1197, 1197.1, and 1198. In June 2019, the parties stipulated to the transfer of the action from Contra Costa County Superior Court to Kern County Superior Court.

In July 2020, Dollar General filed a motion to compel arbitration and stay the proceeding pending completion of arbitration. The motion was supported by two declarations. Dollar General argued that plaintiff must individually arbitrate the alleged wage and hour violations that involved her, whether cast as a PAGA claim or otherwise.

In September 2020, after hearing arguments, the superior court denied the motion. The court's minute order stated (1) an employee's right to bring a PAGA representative claim could not be waived, (2) the rule against waivers was not preempted by federal law, and (3) a PAGA claim could not be split into arbitrable individual claims and nonarbitrable representative claims. Dollar General appealed.

In October 2021, the appeal was fully briefed. The parties waived oral argument. In November 2021, this court affirmed the order denying the motion to compel arbitration. Subsequently, the California Supreme Court denied Dollar General's petition for review.

In October 2022, the United States Supreme Court notified this court that it had granted Dollar General's petition for writ of certiorari, vacated our judgment, and remanded the case for further consideration in light of Viking River, supra , 142 S.Ct. 1906. On November 4, 2022, the mandate and judgment transferring the matter back to this court were received from the United States Supreme Court and we issued an order advising the parties that supplemental briefs were due by November 21, 2022.

After obtaining an extension, the parties filed their supplemental briefs on December 21, 2022. No responding supplement briefs were filed and, by rule, the matter was submitted in January 2023.

DISCUSSION
I. DEFINING TWO TYPES OF CLAIMS AUTHORIZED BY PAGA

Claims authorized by PAGA have been defined and labeled in a variety of ways. The definitions and labels have at times hindered rather than aided the analysis of the legal issues and the establishment of clear precedent. For instance, the United States Supreme Court referred to representative PAGA claims and stated:

"PAGA's unique features have prompted the development of an entire vocabulary unique to the statute, but the details, it seems, are still being worked out. An unfortunate feature of this lexicon is that it tends to use the word "representative" in two distinct ways ...." ( Viking River, supra , 142 S.Ct. at p. 1916.)

In one sense, "PAGA actions are ‘representative’ in that they are brought by employees acting as representatives—that is, as agents or proxies—of the State." ( Viking River, supra , 142 S.Ct. at p. 1916.) In this sense, every PAGA action is representative "because every PAGA claim is asserted in a representative capacity." ( Ibid. ) In the second sense, the word "representative" is used to distinguish so-called "individual" PAGA claims, which are based on Labor Code violations sustained by the plaintiff, from "representative" PAGA claims, which are based on Labor Code violations involving employees other...

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